On August 24, 1990 the Second Circuit granted rehearing en banc of Chestman I and this Court deferred decision on the pending post-trial motions until the Second Circuit's en banc ruling.

On October 7, 1991 the Second Circuit issued its en banc decision. United States v. Chestman, 947 F.2d 551 (2d Cir. 1991), petitions for cert. filed (U.S. Jan. 1 and 2, 1992) ("Chestman II "). Chestman II reversed in part and affirmed in part the panel's decision. Based on the en banc decision in Chestman II the defendants have filed briefs and letter-briefs supplementing the post-trial motions. Defendants' motions are now fully briefed and ripe for decision.

For the reasons set forth below, defendants' motions are denied.

BACKGROUND

To the extent that defendants challenge the sufficiency of the evidence against them, the standard of review is clear.

The evidence at trial, viewed in the light most favorable to the government, see United States v. Simmons, 923 F.2d 934, 953 (2d Cir.), cert. denied, 112 S. Ct. 383, 116 L. Ed. 2d 334 (1991), established the facts as follows.

In late February and March 1986, Teicher purchased stocks in companies within a day or on the day that the company was placed on the Drexel phantom list. On March 14, 1986 Teicher purchased $ 710,000 worth of Warnaco stock on the day after Warnaco was added to the Drexel phantom list. The government also proved that Teicher had traded in other Drexel phantom list stocks, namely Republic Airlines (Count 2) and Westchester Financial Services Corporation (Count 3). GX 81 B.

The evidence also showed that Teicher received material nonpublic information that Michael David had misappropriated from Paul Weiss and its client Triangle Industries. During his direct testimony David stated:

I said [to Teicher that] I had learned within Paul Weiss that American Can at sometime in the future may become a takeover target by a Paul Weiss client, Triangle Industries, but that was uncertain at that time. . . . I said, if it would happen at all it would happen within six months.

Tr. 287-88.

On redirect examination David testified that:

While I conveyed to him that it came from Paul Weiss, I did not mention the actual source of my information. That's Mr. Lee Pershan, the actual lawyer I talked to or I learned it from. . . . I not only told him that Triangle Industries would take over American Can at sometime in the future, depending on certain antitrust barriers, but I also conveyed to him in words which I don't recollect that that information came from Paul Weiss.

Tr. 767-68.

The evidence showed that on March 11, 1986 Michael David told Teicher, in a conversation which took place in Teicher's office, that Paul Weiss was working on a deal involving Revco. Up to this point David had tipped Teicher on four previous Paul Weiss deals, with a tip on American Brands having been given the day before.

David testified that on the morning of March 11, 1986 he "told [Teicher] that the price of the buyout was supposed to go to thirty-five and only thirty-five and that the stock was trading a little bit too close to $ 35 a share." David testified that he told Teicher that he had gotten that information either from Andrew Solomon, another coconspirator, or from Marcus Schloss & Co. Tr. 419, 778. The evidence showed that Teicher acted on the tip that same morning. On March 11, 1986 the opening of Revco trading was delayed because of the announcement of the pending buy-out offer that appeared on the broad tape at 9:57 a.m. Solomon testified that when Solomon's boss Yagoda saw that announcement he told Solomon to tell David to sell Revco stock short because the market price was too high relative to what Yagoda knew about the actual price of the buy-out. Solomon relayed that information to David, who in turn tipped Teicher, who sold 5,000 shares short by 10:21 a.m. Tr. 414, 421, 778, 1214-16.
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The evidence showed that Ross S. Frankel was a corporate vice president at Drexel Burnham Lambert doing research analysis in the domestic arbitrage department. In August 1985 Salsbury was hired to do financial analysis in the department. Ronald Geffen was also part of the research analysis team in the domestic arbitrage department. Tr. 4720-4752.

The evidence showed that Salsbury tipped Frankel about American Brands and told Frankel that the information came from Michael David, whose law firm was representing a company, BAT Industries, that was considering a takeover of American Brands. In the days leading up to March 10, 1986 Salsbury had three conversations with Michael David concerning American Brands and Salsbury related each conversation to Frankel. After the first conversation, Salsbury testified that he told Frankel "that Michael's firm is representing a British client in the acquisition of American Brands." Frankel replied by saying "that it was good information, try to get more, and tell Michael to be careful." After the second conversation with David, Salsbury testified that he told Frankel that "Paul Weiss had gone forward and gotten SEC documents . . . on American Brands." After the third conversation with David, Salsbury testified that he told Frankel "all the information about who the client was . . . I told him in fact that BAT U.S. was the acquirer . . . . that it was -- he knew it came from Paul, we discussed it coming from Paul Weiss." Tr. 2304-06. The evidence showed that Frankel was a lawyer, who had once worked at the firm of Morgan Lewis & Bockius, and was aware of the fiduciary duties lawyers owe to clients. Tr. 4715-17.

On March 10, 1986, after Salsbury relayed his third conversation with David, Frankel purchased ten American Brands call options. Frankel also allowed Salsbury to buy two options in Frankel's account at Drexel Burnham Lambert.

The government also proved a number of incidents from which it was entitled to an inference of knowledge on Frankel's part of the source of inside information. Michael David testified that when Frankel saw David at Teicher's office on March 10, 1986 Frankel warned David to "be a little bit more low key." Tr. 410. Frankel admitted, albeit with a different explanation, that he told David "I don't think you should be playing arb on Paul Weiss's time." Tr. 4888. Frankel testified that he told Salsbury on March 11, 1986 that he had seen David at Teicher's office and that Frankel "thought it was a little strange and not too good an idea." Tr. 5159. Salsbury's version of the conversation is that Frankel "was very upset" and told Salsbury that he "should tell Victor he shouldn't do that any more." Tr. 2314. Sometime later in March 1986 while Salsbury and David spoke on the phone, Frankel told Salsbury to ask David "if it [American Brands] still was on and when it would occur." Tr. 2336.

In May 1990, following the verdicts of guilty, the Teicher defendants renewed their March 23, 1990 motions for judgments of acquittal on all counts of the indictment. The Teicher defendants also moved for judgments of acquittal as to each count of the indictment based on the Second Circuit's decision in Chestman I. The Teicher defendants also moved for judgments of acquittal as to all counts of the indictment on the ground that, when viewed in light of all of the evidence at trial, the testimony of the government's two main witnesses, Michael David and Robert Salsbury was so contradictory and inconsistent on its face that the Court should find their testimony incredible as a matter of law. The Teicher defendants argued that the Rule 14e-3 convictions should be vacated because Rule 14e-3 had been held invalid in Chestman I.

At the conclusion of the evidence the Teicher defendants moved under Fed. R. Crim. P. 29 for judgments of acquittal on Counts 2, 4, 5, 7, 8, 9, 12, 13, 14. This motion focused on the standard for "materiality" of nonpublic information set forth in this Court's March 9, 1990 opinion denying the Rule 29 motions at the close of the government's case. The Court relied on the Supreme Court's holding in T.S.C. Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449, 48 L. Ed. 2d 757, 96 S. Ct. 2126 (1976). See 3/9/90 slip. op. at 2-4. The Teicher defendants argued that false or inaccurate information cannot be material. The Teicher defendants argued that the jury could not find beyond a reasonable doubt that they had been in possession of material information regarding American Can, Allegheny International, American Brands or Revco or regarding Avondale Mills after February 26, 1986. The Teicher defendants contended that the government had failed to show Teicher's knowledge of any harm from his claimed improper conduct with regard to Revco and Republic. In addition, the Teicher defendants contended that the government had failed to establish that trading in Avondale was directed by Teicher. Teicher Trial Mem. 3-23.

In their post-trial motion the Teicher defendants, relying on Chestman I, argued that the government's evidence was insufficient to support convictions under Rule 10b-5. The Teicher defendants maintained that there was insufficient evidence to prove that the they knew the information concerning Revco, the companies on the phantom list (Republic, Westchester and Warnaco) and American Can was confidential. In addition, the Teicher defendants contended that the information concerning American Can, Allegheny, American Brands and Revco could not be material because it was inaccurate. The Teicher defendants argued that the government presented insufficient proof of a single conspiracy. The Teicher defendants contended that the government's proof was insufficient to demonstrate that Teicher ordered trading in Avondale Mills. The Teicher defendants argued that the mail fraud convictions had to be overturned because the information was inaccurate and so could not be property. Teicher Post-Trial Mem. at 5-25.

The Teicher defendants argue that under Chestman II the evidence at trial was insufficient to prove that Teicher knew the information as to Revco, the companies on the phantom list and American Can was confidential and so was guilty of a violation of Rule 10(b)-5. In addition, the Teicher defendants maintain that there is no fiduciary duty with regard to false, stale or inaccurate information. See Teicher Supp. Letter. at 3.

Frankel's post-trial motion challenged the convictions under Counts 8 and 15 for securities and mail fraud related to trading in American Brands, Inc. Relying on Chestman I, Frankel argued that the government had presented insufficient evidence that Salsbury accepted a duty of confidentiality on Paul, Weiss information from David and that Frankel knew that Salsbury was breaching any duty when he provided information to Frankel about the possible acquisition of American Brands. In addition, Frankel argued that there was no evidence that Frankel was ever advised by anyone that the Paul, Weiss information from Salsbury was confidential and had been divulged in violation of a fiduciary duty. Frankel Post-Trial Mem. at 8.

Robert Chestman is a stockbroker. Keith Loeb first sought Chestman's services in 1982, when Loeb decided to consolidate his and his wife's holdings in Waldbaum, Inc. (Waldbaum), a publicly traded company that owned a large supermarket chain. During their initial meeting, Loeb told Chestman that his wife was a granddaughter of Julia Waldbaum, a member of the board of directors of Waldbaum and the wife of its founder. Julia Waldbaum also was the mother of Ira Waldbaum, the president and controlling shareholder of Waldbaum. From 1982 to 1986 Chestman executed several transactions involving Waldbaum restricted and common stock for Keith Loeb. To facilitate some of these trades, Loeb sent Chestman a copy of his wife's birth certificate which indicated that his wife's mother was Shirley Waldbaum Witkin.

On November 21, 1986, Ira Waldbaum agreed to sell Waldbaum to the Grant Atlantic and Pacific Tea Company (A&P). The resulting stock purchase agreement required Ira to tender a controlling block of Waldbaum shares to A&P at a price of $ 50 per share. Ira told three of his children, all employees of Waldbaum, about the pending sale two days later, admonishing them to keep the news quiet until a public announcement. He also told his sister Shirley Witkin, and nephew, Robert Karin, about the sale, and offered to tender their shares along with his controlling block of shares to enable them to avoid the administrative difficulty of tendering after the public announcement. He cautioned them "that [the sale was] not to be discussed," that it was to remain confidential.

In spite of Ira's counsel, Shirley told her daughter, Susan Loeb, on November 24 that Ira was selling the company. Shirley warned Susan not to tell anyone except her husband, Keith Loeb, because disclosure could ruin the sale. The next day, Susan told her husband about the pending tender offer and cautioned him not to tell anyone because "it could possibly ruin the sale."

The following day, November 26, Keith Loeb telephoned Robert Chestman at 8:59 a.m. Unable to reach Chestman, Loeb left a message asking Chestman to call him "ASAP." According to Loeb, he later spoke with Chestman between 9:00 a.m. and 10:30 a.m. that morning and told Chestman that he had "some definite, some accurate information" that Waldbaum was about to be sold at a "substantially higher" price than its market value. Loeb asked Chestman several times that he thought Loeb should do. Chestman responded that he could not advise Loeb that to do "in a situation like this" and that Loeb would have to make up his own mind.

That morning Chestman executed several purchases of Waldbaum stock. At 9:49 a.m., he brought 3,000 shares for his own account at $ 24.65 per share. Between 11:31 a.m. and 12:35 p.m., he purchased an additional 8,000 shares for his clients' discretionary accounts at prices ranging from $ 25.75 to $ 26.00 per share. One of the discretionary accounts was the Loeb account, for which Chestman brought 1,000 shares.

Before the market closed at 4:00 p.m., Loeb claims that he telephoned Chestman a second time. During their conversation Loeb again pressed Chestman for advice. Chestman repeated that he could not advise Loeb "in a situation like this," but then said that, based on his research, Waldbaum was a "buy." Loeb subsequently ordered 1,000 shares of Waldbaum stock.

Chestman presented a different version of the day's events. Before the SEC and at trial, he claimed that he had purchased Waldbaum stock based on his own research. He stated that his purchases were consistent with previous purchases of Waldbaum stock and other retail food stocks and were supported by reports in trade publications as well as the unusually high trading volume of the stock on November 25. He denied having spoken to Loeb about Waldbaum stock on the day of the trades.

In Chestman II the en banc Second Circuit reinstated the Rule 14e-3 convictions, but agreed with the panel that, on the particular facts of the case, the Rule 10b-5 and mail fraud convictions could not stand. The panel's opinion on all three issues was vacated. The en banc court did not rehear the appeal on the perjury conviction so the panel's reversal of that conviction was not disturbed.

one who fails to disclose material information prior to the consummation of a transaction commits fraud only when he is under a duty to do so. And the duty to disclose arises when one party has information 'that the other [party] is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.' 445 U.S. at 228 (citation omitted).

The Second Circuit stated that in Dirks the Supreme Court "held that tippee liability attaches only when an 'insider has breached his fiduciary duty to the shareholders by disclosing the information to the tippee and the tippee knows or should know that there has been a breach.'" Chestman II, 947 F.2d at 565 (citing and quoting Dirks, 463 U.S. at 660). The en banc Second Circuit summarized this theory of liability:

binding these strands of Rule 10b-5 liability are two principles -- one, the predicate act of fraud must be traceable to a breach of duty to the purchasers or sellers of securities, two, a fiduciary duty does not run to the purchasers or sellers solely as a result of one's possession of material nonpublic information.

after Carpenter, the fiduciary relationship question takes on special importance. This is because a fraud-on-the-source theory of liability extends the focus of Rule 10b-5 beyond the confined sphere of fiduciary/shareholder relations to fiduciary breaches of any sort, a particularly broad expansion of 10b-5 liability if the add-on, a 'similar relationship of trust and confidence,' is construed liberally.

Chestman II, 947 F.2d at 567. The Second Circuit noted that a fiduciary duty is not imposed unilaterally when a person is entrusted with confidential information. Id. (citing Walton v. Morgan Stanley & Co., 623 F.2d 796, 799 (2d Cir. 1980)). The Court noted that certain relationships, among them attorney and client, are hornbook examples of fiduciary relationships. Id. at 568. In describing the characteristics of a fiduciary relationship, the Second Circuit stated "[a] fiduciary relationship involves discretionary authority and dependency. One person depends on another -- the fiduciary -- to serve his interests." Id. at 569.

In evaluating the facts of Chestman's conviction, the en banc Second Circuit stated the government was required "to establish two critical elements -- Loeb breached a fiduciary duty to Susan Loeb or to the Waldbaum family and Chestman knew that Loeb had done so." Id. at 570. The Second Circuit found that the government had failed to prove that Loeb was a fiduciary with respect to the Waldbaum family. The Court rejected the notion that marriage automatically imposed a fiduciary duty and held that Loeb was not shown to have been included in the family business. The en banc court reversed the Rule 10b-5 convictions as based on insufficient evidence.
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2. Sufficiency of the Evidence

a. Teicher's Convictions Under Rule 10b-5

Applying the principles of Chestman II to the case at bar I have no difficulty concluding that the evidence against Teicher was sufficient to sustain his conviction. The jury was repeatedly instructed that to convict the defendants the government had to show that the defendants had traded on confidential information that they knew had been misappropriated in violation of a duty not to disclose. Tr. 7231-45.

Counts 2, 3 and 10 involved trading in the securities of companies that were on the Drexel phantom list. As an employee of Drexel Burnham Lambert with access to the names of the companies on the list, Robert Salsbury was clearly a fiduciary with respect to Drexel's information whether as a "temporary insider" or as a fiduciary. Salsbury testified that Teicher had pressed him for the names of companies on the list even though Salsbury resisted. When Salsbury finally gave Teicher the information, Salsbury warned Teicher not to reveal the names of companies on the list. The evidence was sufficient to establish that Teicher obtained information from the Drexel phantom list and traded on that information. In addition, Teicher understood from his experience the import of knowing the names of companies on the list. Tr. 2253, 3018, 3031-33, 6287-93. This evidence was more than sufficient for the jury to find that Salsbury had misappropriated the information and that Teicher knew the information was obtained in violation of a duty not to disclose and was confidential.

The Teicher defendants' argument rests on a unjustifiably narrow view of the evidence at trial, given the light in which the evidence must be viewed on these motions. Hess testified that when David called and told him to buy stock in Avondale Mills Hess went ahead and purchased about 4,000 shares for Victor Teicher & Co., L.P. Hess testified that he made these purchases based on David's call without consulting Victor Teicher. Tr. 2093-94. While these two points in isolation support the arguments of the Teicher defendants, the whole of Hess's testimony gave the jury ample basis to conclude that the trading was done with Teicher's approval.

Hess testified that he had been in the office when Michael David came to the office for two days in March 1986. Hess knew that during this period David helped set up an account at another firm and gave Teicher the tip concerning American Brands. Tr. 2069-84. Hess testified that when David called he asked for Teicher and when he was told that Teicher was not there, he told Hess to purchase shares in Avondale Mills. Tr. 2091-93. Hess testified that on no other occasion did he take a call such as David's and then purchase stock for the firm. In addition, when Hess reported the purchase to Teicher, Teicher was not concerned and said, Hess testified, "it was fine." Tr. 2095-2098. Other witnesses testified that no trading was done without Teicher's approval. Tr. 3502-03, 3507-10, 4025. The jury was entitled to consider Hess's story and conclude that Teicher authorized the purchase. The fact that Teicher then ratified the sale also gave the jury sufficient evidence to conclude that the purchases were made with Teicher's approval in principle, even if the actual call came from Teicher's coconspirator David.

based on the plain language of section 14(e) [of the Securities Exchange Act of 1934], and congressional activity both before section 14(e) was enacted and after Rule 14e-3(a) was promulgated, we hold that the SEC did not exceed its statutory authority in drafting Rule 14e-3(a).

Confirmation slips have been held to be integral and in furtherance of mail fraud schemes based on securities fraud. The Second Circuit has stated that such slips can be used to notify other conspirators that purchases have been made, allow other conspirators to keep track of purchases, and help conceal the fraud by maintaining an appearance of normality. United States v. Grossman, 843 F.2d 78, 86 (2d Cir. 1988), cert. denied, 488 U.S. 1040, 102 L. Ed. 2d 988, 109 S. Ct. 864 (1989); see United States v. Marando, 504 F.2d 126, 129-30 (2d Cir.), cert. denied, 419 U.S. 1000, 95 S. Ct. 317, 42 L. Ed. 2d 275 (1974).

In the case at bar the confirmation slip for 12 American Brands call options served several purposes. Ten options were Frankel's and two of the options were for Salsbury. The slip confirmed Frankel's ownership and purchase price and confirmed these purchases to Salsbury. The slip also notified Salsbury how much Salsbury owed Frankel. The jury had sufficient evidence before it to conclude that the mailing of the confirmation slip was "'incident to an essential part of the scheme.'" Schmuck v. United States, 489 U.S. 705, 712, 103 L. Ed. 2d 734, 109 S. Ct. 1443 (1989) (citation omitted). I have no difficulty reaching the same conclusion.

Prior to the start of the trial Frankel moved to dismiss the securities and mail fraud counts based on American Brands as duplicative. The Court held that the indictment was not duplicative on its face because the securities count would be proved by use of a securities exchange while the mail fraud count would be proved by use of the mails. The Court noted that if the evidence at trial indicated that the two counts were duplicative, the issue could be revisited after the trial. See Teicher, 726 F. Supp. at 1436-37. It is axiomatic that an indictment cannot charge the same offense in two counts. Whalen v. United States, 445 U.S. 684, 688, 63 L. Ed. 2d 715, 100 S. Ct. 1432 (1980). The test for establishing whether two counts are duplicative was set forth by the Supreme Court in Blockburger v. United States, 284 U.S. 299, 304, 76 L. Ed. 306, 52 S. Ct. 180 (1932):

Where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.

(citation omitted). "When the Blockburger test for multiplicity has been satisfied, and there is no evidence of congressional intent to the contrary, authority to impose cumulative penalties is presumed to be intended." United States v. Reed, 639 F.2d 896, 906 (2d Cir. 1981) (citation omitted).

Frankel also argues that the indictment alleged multiple conspiracies, including one conspiracy with respect to David and Paul, Weiss information and a second conspiracy with respect to the Drexel phantom list and Teicher.
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Without the securities fraud and mail fraud counts concerning American Brands, Frankel argues, the jury would have not basis to conclude that there was a single conspiracy involving the phantom list and the Paul Weiss information. Frankel contends that the conspiracy charge must be retried so the jury can be instructed on this issue. See Nersesian, 824 F.2d at 1302. Frankel Post-Trial Mem. at 18. As I have held that the securities and mail fraud convictions relating to American Brands will not be vacated, there is no need to reach Frankel's argument on this point.

IV. Frankel's Perjury Convictions

Frankel was convicted on Count 16 of the indictment which charged him with perjury before the S.E.C. on June 3, 1986. Specification 1 charges that Frankel perjured himself when he testified that he asked Salsbury to do research on American Brands in late February. Specification 2 charges that Frankel committed perjury when he testified that Salsbury did an analysis of American Brands before March 10, 1986. Specification 3 charges that Frankel committed perjury when he testified that on March 10, 1986 Salsbury did not tell him the source of the rumor that American Brands was being taken over by BAT. Specification 4 charges that Frankel committed perjury when he testified that he had not asked Salsbury to do any research on American Brands on March 10, 1986 and that the research was done prior to March 10, 1986.

Relying on the "two witness" rule for perjury convictions, Frankel argues that the evidence was insufficient to convict him of perjury. On Specification 3 Frankel argues that there is no corroboration of Salsbury's testimony that he told Frankel the source of the American Brands information. As to Specifications 1, 2 and 4 Frankel argues that there was no corroborating evidence to establish that Frankel did not ask Salsbury to do research on American Brands prior to March 10, 1986. Frankel Post-Trial Mem. at 19-25.

in prosecutions for perjury, however, it has long been the rule that a conviction may not be obtained solely on the uncorroborated oath of one witness. . . . The rule is satisfied by the direct testimony of a second witness or by other evidence of independent probative value, circumstantial or direct, which is 'of a quality to assure that a guilty verdict is solidly founded.'

United States v. Weiner, 479 F.2d 923, 926 (2d Cir. 1973) (citations omitted). "The 'two-witness' rule requires that the alleged perjurious statement be established either by the testimony of two independent witnesses or by one witness and corroborating evidence that is 'inconsistent with the innocence of the [defendant]'" Chestman I, 903 F.2d at 81 (citations omitted).

"In assessing the sufficiency of the corroborative evidence, two elements are considered: '1) that the evidence, if true, substantiates the testimony of a single witness who has sworn to the falsity of the alleged perjurious statement; 2) that the corroborative evidence is trustworthy.'" Id. (citing and quoting Weiler v. United States, 323 U.S. 606, 610, 89 L. Ed. 495, 65 S. Ct. 548 (1945)). In construing the requirement that corroborating evidence be "inconsistent with the innocence of the defendant" the Second Circuit has said that it "means no more than that such evidence must tend to substantiate that part of the testimony of the principal prosecution witness which is material in showing that the statement made by the accused under oath was false." Weiner, 479 F.2d at 927-28. "When a jury relies on circumstantial evidence, however, it must be demonstrated that this evidence has 'independent probative value' if 'standing alone.'" Chestman I, 903 F.2d at 82 (citing and quoting United States v. Freedman, 445 F.2d at 1220, 1226 (2d Cir. 1971)). In light of these standards the jury in this case was instructed on the "two witness" rule. Tr. 7289-90.

The government's proof on Specification 3, that Salsbury told Frankel the source of the American Brands rumor, satisfied the two-witness rule. David testified that when Frankel saw him in Teicher's office on March 10, 1986, Frankel warned David to be "a little bit more low key." Tr. 410. Frankel admitted warning David and admitted telling Salsbury that it was "not too good an idea" for David to be in Teicher's office. Tr. 4888, 5159. This evidence corroborated Salsbury's testimony and permitted the clear inference that Frankel knew where the American Brands information originated.

The evidence showed that on March 10, 1986 Frankel for the first time permitted Salsbury to purchase two American Brands call options in his account in violation of Drexel and New York Stock Exchange rules. In addition, Geffen testified that he saw Salsbury and Frankel talking on March 10, 1986 and that soon after he heard Frankel tell Salsbury to do research on American Brands. Geffen also testified to actions by Frankel indicating guilty knowledge: Frankel asked Geffen to retrieve Salsbury's check from the cashier at Drexel, Frankel destroyed a margin slip with the check and Frankel instructed Geffen to destroy an incriminating page from Frankel's desk calendar. Tr. 4282-84, 4313. All of this evidence corroborated Salsbury and led to the clear inference that Frankel lied when he told the S.E.C. that Salsbury had just passed on a "rumor."

The government's case also provided ample corroborating evidence to prove that Frankel lied to the S.E.C. about Salsbury's research on American Brands, the subject of Specifications 1, 2 and 4. Frankel testified that he had had Salsbury do research in February 1986 and that Frankel had not asked Salsbury to do research on March 10, 1986. Specifications 1, 2 and 4. Salsbury testified that he had not done research in February and that Frankel first asked him to do research after the purchase of American Brands call options on March 10, 1986. Tr. 2318-2320.

As there was ample evidence presented at trial to satisfy the "two witness" rule, Frankel's motion to vacate the perjury conviction is denied.

ORDER

Defendants' motion are denied in their entirety. Sentencing of the Teicher defendants will be on April 27, 1992 at 4:30 p.m. and sentencing of Frankel will be on April 28, 1992 at 4:30 p.m. in Room 307 of the United States Courthouse.

Dated: New York, New York, February 25, 1992

CHARLES S. HAIGHT, JR., U.S.D.J.

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